When an employer pays an hourly rate less than the minimum wage or makes improper deductions that reduce a worker’s take-home pay below the minimum wage, that’s wage theft.
The Fair Labor Standards Action provides for a federal minimum wage, and many states (and even cities) have their own minimum wage protections. If an employee works 40 hours or fewer hours a week, he or she is entitled to be paid the applicable minimum wage for all the time they put in.
There are some items like employment taxes that an employer can be required by law to deduct a worker’s wages. Other deductions can be taken with the worker’s consent, so long as the employer doesn’t profit or benefit from the transaction:
- Union dues
- Insurance premiums
- Voluntary contributions to charitable and social organizations
- Payments to an employee’s creditor under a garnishment, wage attachment, or bankruptcy
Also, an employer can deduct the cost of board, lodging, or other “facilities” so long as the cost is reasonable, primarily for the benefit of the employee rather than the employer, the employee actually receives the benefit of the furnished facility.
Many deductions are improper and unlawfully reduce workers’ pay below the minimum wage, regardless of whether the employer takes the costs out of wages or requires employees to reimburse the employer:
- Tools and materials used in the employer’s business
- Uniforms, including rental and laundering
- Cash register shortages
- Damage to the employer’s property
- Financial losses due to an employee’s negligence
- Physical exams required by the employer
- Transaction fees associated with employee payroll debit cards
If your employer has attempted to deduct these or other improper costs and expenses from your pay, diluting your compensation below the minimum wage, you may be entitled to recover the amount of those deductions.